Chemical New York Corp., the nation's sixth-largest bank holding company, said Thursday that its second-quarter profit rose 39.7% from a year ago while its first-half earnings were up 24.6%.
The company said it benefited from an interest-rate environment in which its costs to obtain funds fell at a more rapid rate than its income from loans and other investments.
It also had a huge gain from selling some of its investment securities as it took profits during the recent sharp rally in government bond prices.
Chemical, the parent of sixth-ranked Chemical Bank, was the first of the major banking companies to report its second-quarter earnings.
New York-based Chemical said its net income was $107.3 million for the three months ended June 30, compared to $76.8 million a year earlier.
For the first six months of the year, Chemical's earnings amounted to $197 million, compared to $158.1 million a year earlier.
Its net interest income rose to $457.6 million for the second quarter, up 6.9% from $428.1 million a year ago.
The company said it benefited from the decline in interest rates because the rates that it had to pay to obtain funds "closely followed the downward trend in rates."
At the same time, it said, its average earnings rate fell more slowly because of a higher average volume of fixed-rate consumer loans and government securities holdings and a "relatively slow decline in rates earned on prime-based loans."
Chemical had a gain of $69.6 million in the quarter from the sale of investment securities, up from a $3-million gain from such activity a year earlier.
In addition, it said, it had a gain from trading account activities of $13.7 million in the quarter, as opposed to a $9.4-million loss from such activity last year.
Chemical boosted its second-quarter loan-loss provision to $65.5 million from $38.1 million a year ago. The allowance for loan losses was $479.8 million on June 30, compared to $430.1 million on June 30, 1984.
Chemical's assets were $57.3 billion on June 30, compared to $52.2 billion on Dec. 31, 1984, and $56.5 billion on June 30, 1984.
Deposits at Chemical Bank were $37.26 billion on June 30, compared to $35.8 billion a year ago.
Eastern Airlines Posts 4th Straight Quarterly Profit
Eastern Airlines announced its most profitable second fiscal quarter since 1979, marking the fourth straight quarter of profits for the long-struggling airline and boosting its net profit for the past six months to a company record.
Net income for the second quarter of 1985 was $25.5 million after $43.6 million was set aside for its employee profit-sharing program. Net profit for the year to date climbed to $49.8 million after setting aside $72.5 million for employees. This compared to a $52.3-million net loss for the first half of 1984.
The Miami-based company's operating expenses for the second quarter were slightly higher than last year--$1.2 billion, compared to $1.1 billion. However, the second-quarter operating expenses included $43.6 million held for 1985 employee profit sharing, Eastern said.
Semiconductor Unit Cited as UTC's Net Skids 68%
United Technologies, citing losses at its semiconductor unit, said its second-quarter profit skidded 68% from a year earlier on a 2.3% decline in revenue.
The company said net income dropped to $54.8 million from $169 million a year earlier. Revenue fell to $4.08 billion from $4.18 billion.
The company said that its Mostek semiconductor subsidiary continued to be adversely affected by the computer industry's slump and that it is continuing to restructure Mostek in a bid to narrow its losses.
For the first half of 1985, United Technologies said its profit dropped 36% to $192.4 million from $302.5 million a year earlier. Six-month revenue slipped to $8 billion from $8.07 billion.
Kaiser Aluminum Records $14-Million Loss in Quarter
Kaiser Aluminum & Chemical Corp. reported that it lost $14.3 million in its second quarter ended June 30, blaming the loss on lower prices for aluminum.
It was the company's fourth consecutive quarterly loss and compares to profits of $32.5 million in the year-ago quarter.
Revenue increased 6% to $854.3 million from $794.7 million in the 1984 second quarter.
The major share of the loss was sustained by the company's aluminum division, while its chemical and real estate operations were profitable during the quarter.
Kaiser Aluminum Chairman Cornell C. Maier said in a statement that reduced prices for fabricated aluminum products, which were 12% below the 1984 average, wiped out the company's cost savings from work-force reductions, renegotiated union contracts and productivity improvements.
The employees' "sacrifices to return the aluminum division to competitiveness and profitability . . . will produce the desired effect once industry market conditions improve," Maier said.
However, in an interview last month, Maier predicted that the company would lose money for the fiscal year although improving results "considerably" from fiscal 1984, when the Oakland-based company lost $53.9 million.